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China plans to quadruple EV production; record sales in 2016

Plug-in car sales in China were expected to exceed 350,000 and the country is now reported to have the largest EV fleet in the world. Manufacturers are rushing to boost EV production in China - which is expected to quadruple by 2020 - stoking fears of potential overcapacity. Meanwhile Tianjin, a major industrial city in north China has introduced 500 new electric buses, boosting its electric fleet to 1,346 vehicles.

Unlike other markets, in China pure EVs comprise most of the plug-in market with 75% of all sales. Domestic vehicle makers dominate with 95% of sales, led by BYD which has a 31% market share. Other top selling plug-ins come from Geely, Zotye, BAIC, Chery and Zhidou

The only foreign carmaker selling any significant number of plug-ins is Tesla, which is outselling all other foreign brands in China with a 3% market share.

China's Industry and Information Technology Minister Miao Wei recently announced that the country plans to quadruple its 'new energy' vehicle (mainly plug-ins) annual output to two million by 2020. He said that he expect that by 2025, at least one in every five cars sold in China will be a new energy model.

In 2016, China produced 517,000 new energy vehicles. Miao Wei said the government will continue to improve policies, boost research and development, invest in charging infrastructure construction, and promote international cooperation to help the sector grow.

China built over 100,000 public charging points in 2016, ten times the figure in 2015, and a comprehensive charging grid has taken shape in big cities like Beijing, Shanghai, and Shenzhen.

The manufacturers rush to produce new energy vehicles in China has stoked fears of severe overcapacity, according to a China Daily report, as traditional car makers and newcomers are rushing to exploit the segment that "is believed to be the largest gold mine of the automotive industry".

Wanxiang Group recently gained approval for a plant in Zhejiang province, which will be able to produce 50,000 electric cars per year when completed. The move made the large auto parts supplier the sixth company approved to produce electric cars in China this year.

The six newcomers' annual capacity will reach a combined 1.13 million units per year around 2020. The figure exceeds 2 million units when coupled with those from NextEV, Chehejia and LeEco, all dotcom companies. Meanwhile, traditional car manufacturers have even more ambitious plans. Public statistics show that the combined annual capacity of 13 major passenger carmakers including BYD, SAIC Motor and JAC Motor will exceed 4 million units by 2020.

That means China will be able to produce about 7 million new energy vehicles a year by the end of the decade, more than three times the goal the country has set: 2 million units sold annually in 2020.

There have also been rapid developments in China's electric bus sector. A fleet of 500 electric buses was recently introduced to Tianjin as the result of a joint venture between Tianjin Bus Group and Shenzhen-based carmaker BYD. Tianjin now has 3,220 clean energy buses with 1,346 powered by electricity.

The buses have a range of more than 200 kilometers following a full charge, enough for them to run their daily routes.

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